15 Feb 2018
Trumps Hints at Possible Trade Negotiation with TPP Countries
President Trump said at the World Economic Forum in Switzerland that the United States would consider negotiating a free trade agreement with those Trans-Pacific Partnership countries with which it does not already have FTAs, “either individually, or perhaps as a group, if it is in the interests of all.” Similarly, Trump said in a CNBC interview that he would consider joining TPP “if we were able to make a substantially better deal.”
Trump withdrew the United States from the TPP just days after his inauguration last year and has consistently expressed a preference for bi-lateral FTAs. Somewhat unexpectedly, the 11 other TPP countries reworked the agreement to reflect the U.S. departure, suspending various sections that could be reinstated should the United States ever re-join and making various other changes.
Press reports indicate that while the other TPP members would be interested in having the United States participate, they may not be willing to accept the significant changes the Trump administration would likely demand. “I can't see wholesale change to” the TPP as it now stands “to accommodate the Americans,” an Inside US Trade article quoted Australian trade minister Steven Ciobo as saying. “We want the U.S. back, but we need to be realistic about what can be achieved.”
According to information from the Canadian government, the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) incorporates by reference the obligations (rules and market access outcomes) contained in the original TPP agreement, except for a list of 22 original provisions the application of which the parties have agreed to suspend upon entry into force of the agreement. Canada secured a number of these suspensions, particularly in the area of intellectual property and investor-state dispute settlement, in an effort to optimise and rebalance the agreement among the remaining member countries.
The Canadian government also indicates that the expected economic benefits of a CPTPP for Canada are greater than they were for the TPP. According to economic modelling, Canada’s gross domestic product gains would total CAN$3.4 billion under the CPTPP, compared with CAN$2.8 billion under the TPP. This is due to the fact that without the United States in the agreement Canadian businesses will gain a “first mover” advantage in key CPTPP markets such as Japan, and Canada will normally continue to enjoy privileged access to the U.S. market through NAFTA.
The CPTPP agreement is now being translated into French and Spanish. Once that process is complete, the parties will undertake a legal review of the agreement in all three official languages (English, French and Spanish). The agreement will be signed on 8 March and the text will be made public once the legal review is complete.